The beginning inventory at Midnight Supplies and data on purchases and sales for a three month period ending March 31 are as follows: Date Total Per Unit $70.00 Jan Transaction Number of Units Inventory 2,500 Purchase 8.000 1 $175,000 10 78.00 624,000 28 Sale 3,800 140.00 532,000 30 Sale 1.250 140.00 175,000 Feb. 5 Sale 500 140.00 70,000 10 Purchase 17.000 80.00 1,360,000 16 Sale 9,100 145.00 1,319,500 1,261,500 28 Sale 8,700 145.00 Mar 5 Purchase 14,300 81.60 1.166,880 14 Sale 9,800 14500 1,421,000 25 Purchase 3.000 82.00 246,000 30 Sale 7.900 145.00 1.145,500 Instructions 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record star to the one wustrated in Exhibit 3 using the first-in, first-out method 2. Determine the total sales and the total cost of goods sold for the period Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account and date your journal entry March 31 Refer to the Chart of Accounts for exact wording of account titles 3. Determine the gross profit from sales for the period, 4. Determine the ending inventory cost as of March 31 5 Based upon the preceding data, would you expect the ending inventory using the last in first-out method to be higher or lower? Midnight Supplies General Ledger ASSETS REVENUE 110 Cash 410 Sales 610 Interest Revenue EXPENSES 111 Petty Cash 120 Accounts Receivable 131 Notes Receivable 132 Interest Receivable 141 Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation Store Equipment 510 Cost of Goods Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 221 Notes Payable 222 Interest Payable 231 Salaries Payable 132 Interest Receivable 141 Inventory 145 Office Supplies 146 Store Supplies 151 Prepaid Insurance 181 Land 191 Office Equipment 192 Accumulated Depreciation Office Equipment 193 Store Equipment 194 Accumulated Depreciation Store Equipment 510 Cost of Goods Sold 515 Credit Card Expense 516 Cash Short and Over 520 Salaries Expense 531 Advertising Expense 532 Delivery Expense 533 Insurance Expense 534 Office Supplies Expense 535 Rent Expense 536 Repairs Expense 537 Selling Expenses 538 Store Supplies Expense 561 Depreciation Expense-Office Equipment 562 Depreciation Expense-Store Equipment 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 221 Notes Payable 222 Interest Payable 231 Salaries Payable 241 Sales Tax Payable EQUITY 310 Common Stock 311 Retained Earnings 312 Dividends 1. Record the inventory, purchases, and cost of goods sold data in a perpetual inventory record similar to the one ilustrated in Exhibit 3 using the first in first-out methodu Sold Unit Cost column and in the inventory Unit Cost column Cost of Goods Sold Purchases Date Unit Cost Quantity Unit Cost Total Cost Date Quantity Jan 1 10 10 s 28 s I U 28 S s 30 2 Feb 5 S 10 10 10 5 16 20 5 5 14 s s 25 25 30 $ > Next xht 3 using the first-in, first-out method Under Fifo, funts are in inventory at two different costs, enter the units with the LOWER unit cost first in the cost of Goods Inventory Cost of Goods Sold Total Cost Quantity Unit Cost Unit Cost Total Cost $ S S $ $ S s s S S 5 S $ S IS G $ S s 5 S S S S s s s s S $ 5 S 5 $ 5 S 5 S 5 S S s S 5 S s Total Cost Quantity Unit Cost Date Unit Cost Quantity Jans 10 S 10 5 28 $ 28 s 30 S Feb. 5 10 $ 10 S 10 s 10 28 Mar 5 5 5 S 14 s 14 25 S 25 30 30 31 Balances Quantity Unit Cost Total Cost Unit Cost Total Cost is s S S $ s s S s S S S S UUUUU S non 5 5 $ S $ S $ S S S o S S S $ s S S S S 5 S $ $ S S S S s Journal 2. Determine the total sales and the total cost of goods sold for the period Journalize the entries in the sales and cost of goods sold accounts. Assume that all sales were on account and date your journal entry March 31 Refer to the Chart of Accounts for exact wording of account holes PAGE 10 JOURNAL ACCOUNTING EQUATION ASSETS DATE LABILITIES EQUITY DESCRIPTION OEMT CREDIT POSTRE 3 Final Questions 3. Determine the gross profit from sales for the period 4. Determine the ending inventory cost as of March 31 5. Based upon the preceding data, would you expect the ending inventory using the last in first-out method to be higher or lower? O Higher Lower